The impact of global budget payment reform on systemic overuse in Maryland

Allison H. Oakes, Aditi P. Sen, Jodi B. Segal

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


Background: Medical overuse is a leading contributor to the high cost of the US health care system and is a definitive misuse of resources. Elimination of overuse could improve health care efficiency. In 2014, the State of Maryland placed the majority of its hospitals under an all-payer, annual, global budget for inpatient and outpatient hospital services. This program aims to control hospital use and spending. Objective: To assess whether the Maryland global budget program was associated with a reduction in the broad overuse of health care services. Methods: We conducted a retrospective analysis of deidentified claims for 18–64 year old adults from the IBM MarketScan® Commercial Claims and Encounters Database. We matched 2 Maryland Metropolitan Statistical Areas (MSAs) to 6 out-of-state comparison MSAs. In a difference-in-differences analysis, we compared changes in systemic overuse in Maryland vs the comparison MSAs before (2011–2013) and after implementation (2014–2015) of the global budget program. Systemic overuse was measured using a semiannual Johns Hopkins Overuse Index. Results: Global budgets were not associated with a reduction in systemic overuse. Over the first 1.5 years of the program, we estimated a nonsignificant differential change of −0.002 points (95%CI, −0.372 to 0.369; p = 0.993) relative to the comparison group. This result was robust to multiple model assumptions and sensitivity analyses. Conclusions: We did not find evidence that Maryland hospitals met their revenue targets by reducing systemic overuse. Global budgets alone may be too blunt of an instrument to selectively reduce low-value care.

Original languageEnglish (US)
Article number100475
Issue number4
StatePublished - Dec 2020


  • Alternative payment models
  • Global budgets
  • Low-value care
  • Overuse
  • Quality measurement

ASJC Scopus subject areas

  • Health Policy


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